Although the Eighth Circuit Court of Appeals brought Capitol Records, Inc. v. Thomas-Basset to a long-overdue end this week, the decision’s reasoning create a perplexing set of incentives for individuals who reflect on copyright jurisprudence before deciding whether to infringe. The case arose from a complaint filed by record labels on the basis of 24 songs made available on KaZaA, which, the plaintiffs claimed, violated their distribution right under the copyright statute.
Three trials followed: In 2007, a jury awarded damages in the amount of $222,000, after which the district court ordered a new trial on the basis of an erroneous jury instruction which characterized “making available” a work protected by copyright as infringement of a proprietor’s distribution right. A second jury awarded damages of $1,920,000, which the district court remitted to $54,000. A third and final jury awarded $1,500,000, which the district court reduced to $54,000, then finding that the due process clause constitutionally capped the damages at three times the statutory minimum.
The plaintiffs appealed to reinstate the award of $222,000 on the theory that the jury instruction was not erroneous and thus no second (or third) trial should have occurred. Thomas-Basset, in contrast, sought affirmance that $54,000 was the maximum award constitutionally permissible. The Eighth Circuit ruled in favor of the plaintiffs on the jury instruction question and against Thomas-Basset on the constitutional question; on the latter question, the court found that the total $222,000 award was constitutional even though the penalty rate of $9,250 might be unconstitutional if Thomas-Basset had infringed more songs:
“If [plaintiffs] had sued over 1,000 recordings, then a finder of fact may well have considered the number of recordings and proportionality of the total award as factors in determining where within the range to assess the statutory damages. If and when a jury returns a multi-million dollar award for noncommercial online copyright infringement, then there will be time enough to consider” the constitutional question.
Once such a case were brought, though, the Eighth Circuit would create an odd precedent if it were to find that statutory copyright damages are “wholly disproportionate to the offense” on the basis of the total bill rather than the per-violation penalty. Thomas-Basset’s case makes clear that juries will issue judgments ranging from $222,000 to $1,920,000 based on the same 24 instances of copying, and the Eighth Circuit suggests it will not find a constitutional limit on damages for non-commercial copying until a multi-million dollar award is appealed. If that limit were drawn at, say, $1,000,000 or $2,000,000, though, it would suggest that anyone who has non-commercially made protected material available online on 24 occasions within the statute of limitations may proceed to commit another 1,000 violations without subjecting herself to additional liability.
What effect do you think the decision will have on infringing behavior and whether or where a due process limitation on statutory damages for non-commercial online copying should be drawn? Please feel free to add your comments below.